What is my car worth?
This is a question that car owners often think about, usually as the time to sell it approaches. Perhaps you have a fairly new car that you are thinking of trading in, to get something better suited to your current lifestyle. Or maybe you have an old car that is reaching the point where it needs to be replaced. The answer to the question of "What is my car worth?" is a complex one that depends on many different factors.
We can help you to find the answer. At SellMyCarOnline.com, we get this question often. Because we purchase thousands of cars each month, we know a few things about the car appraisal and car buying process. What we have learned is that it's not as easy to give you a ballpark value number as you might think.
Table of Contents
There are so many things that affect what your car is worth
A large number of different variables are involved in the process of vehicle appraisals. Some are easy to figure out, but others can be difficult. For example, the steady loss of value through depreciation is a fact of life for most cars. There are also multiple and varied pricing models, but they all start with the details that relate to your specific vehicle:
Once that you have dealt with all of that, you must then make sense of the many issues present in the marketplace when you are ready to sell, as well as the expectations of the potential buyers of your car:
We will show you how to estimate the value of your car, using a variety of pricing guides, as well as other sources in the used car marketplace. You will discover the specific factors that matter most to used car shoppers, car dealers, and salvage yards/auto recyclers. From all of this, you should be able to get a more accurate idea of what your car is worth.
Finally, you will learn some easy tips on how to maximize your vehicle's value when you sell your car. Let's go!
First, a word about depreciation
Depreciation is a brutal fact of automotive life. The moment that you drive a new car off the dealer's lot, it immediately loses 10% of its value. One year later, it is worth 20% to 30% less than new. Three years from new, it has lost 45%, and after five years, that rises to 60%. That's bad enough, but put above-average mileage on the car, or let its condition deteriorate, and it gets even worse.
If you are the type of car owner that likes to drive a vehicle until its wheels fall off, depreciation will not affect you. But if you have a fairly new car that you are looking to sell, depreciation is a major factor in the valuation of your car. You can mitigate its effects somewhat if your car has low mileage and is in excellent condition, but it still takes a toll.
On the other hand, buyers of four- or five-year old used cars can get some excellent deals, thanks to the time value of depreciation. It all depends which side of the transaction you are on.
Pricing models and what they mean
The first question to ask here is, "Which book?" There are several different valuation guides, such as Kelley Blue Book (KBB), Edmunds and NADA guides. While these guides are a great place to start when it comes to determining the value of your vehicle, they can't give you the whole story. Complicating matters, each of these guides will give you several different types of values. We will explain these values in this section.
That said, these resources should be the first place you go to get a general idea of what your vehicle is worth. Each of them uses its own proprietary formula for estimating used car values, so each one will vary somewhat from the others. Ideally, you should check as many as possible when valuing your car, to get as accurate a "ballpark" figure as possible. These guides are available free online - you can use the links provided.
Car-related factors that influence a car's value
There's a useful saying about the world of automobiles, and it goes like this:
"All new cars are alike, but no two used cars are alike."
Think about it. Every new car, sitting unsold on a dealer's lot, is factory fresh. No one has driven it to work or school, no one has taken a trip to Grandma's in it, and no one has eaten a burger and fries in it. It is pristine and unblemished, and as such, it is the same as any other new car. Whether you buy a given new vehicle from dealer X or dealer Y, you are getting the exact same thing. A new car is a blank canvas.
And then there is the diverse world of used cars. Some are treated well, kept clean, serviced regularly, and owned with pride. Others are abused, with piles of garbage inside, torn upholstery, dings and dents all over their grime-caked bodies, never having seen the inside of a service department. Most used cars fall between these two extremes - where on this spectrum does your car sit?
Let's review the car-based pieces of the used car valuation puzzle. Some of these are simply historical facts, some are the result of use or abuse, some are the results of random events, and some may even surprise you.
Your car's year, make, model, and trim level
A large number of different variables are involved in the process of vehicle appraisals. Some are easy to figure out, but others can be difficult. For example, the steady loss of value through depreciation is a fact of life for most cars. There are also multiple and varied pricing models, but they all start with the details that relate to your specific vehicle:
Your car's mileage
This is another basic but important measurement of your car's value. The number of miles on your car is a direct index of how much wear is on your car, and how much life is left in it. Most used car buyers will accept an average amount of miles, which is normally between 12,000 and 15,000 miles per year. Valuation guides will classify this as normal mileage. A lower amount of mileage will increase your car's value, and a higher amount will decrease it.
Your car's age
As we explained in the section above on depreciation, your car's age has a direct effect on its value. The older your car is, the less it is worth, compared to its original new and unused condition. Its model year will correspond directly to its age, for valuation purposes.
Your car's factory options
While there are some options that will increase value in a used car, there are many that do not. Leather upholstery and a sunroof are desirable upgrades in most buyers' eyes, and they will usually increase what your car is worth.
But many other options will not bring much on the resale market. These items include upgraded stereos and cosmetic appearance items. Tech features like navigation and voice recognition systems on older cars do not age well, and will often be perceived as obsolete technology, compared to the greatly improved performance of the newest systems.
Be aware that most cars sold have the middle-level trim. These vehicles come with the most useful but not the most extravagant options. Most buyers will value items like power windows, remote door locks, and cruise control, but won't want to spend on options they don't believe they need. This is why the top trim levels of a given vehicle are not priced much higher than the mid-level trims, once they land on the used car market. This works out better for buyers than sellers.
Your car's drivetrain
Your drivetrain is all the parts that work together to move your car forward (or reverse, when that is needed). This includes your engine, transmission, and drive axles. Let's break it down:
The primary choice here is automatic vs. manual. The vast majority of today's vehicles come with automatic transmissions, and for good reason. They are easy to use and are usually preferable, considering the heavy traffic that so many drivers have to deal with these days. For the average used car, an automatic transmission will appeal to more buyers, and will help to sell the car faster. If your car has an automatic transmission that was an extra-cost option, it will retain most of its value.
Manual transmissions, on the other hand, give the driver a greater sense of control and involvement in the driving process. Manual transmissions are found today only on a few specific types of cars. These are small economy cars (for cost reasons), sports cars, sports sedans, and high-performance cars. While driving a manual transmission does require some practice, it is an easy skill to learn. The small subset of drivers who prefer a manual really prefer a manual, and they will perceive extra value in a car with a manual transmission. If you are selling a car with a manual transmission, you will do much better if you can reach those buyers who consider it an important feature. For the rest of the market, it is an undesirable feature that will reduce its value.
All-wheel drive/4-wheel drive
If you live in an area where winter driving conditions are a concern, all-wheel drive or four-wheel drive is widely seen as a useful safety feature to have. It should add value to your car if it is so equipped, and it may also be considered beneficial in places where winters are mild, but there is lots of rain.
Most cars are equipped with the standard engine that the factory offered, and this is more than adequate for most used car buyers. Most of these buyers are interested in good fuel economy, and not so much in extra performance. But this is not a hard and fast rule. Here are some possible alternate scenarios:
More powerful optional performance engines
The value of an upgraded optional engine will be apparent to performance-oriented buyers, who are much more likely to seek a used car with higher levels of power. These buyers will also be more interested in sporty-type cars with these engines. Muscle cars, sports cars, and specialized performance vehicles, as well as luxury sedans and SUVs with plenty of horsepower, are worth more to these buyers, compared to mass-market vehicles that simply have a V6 instead of an inline 4-cylinder engine.
One red flag to be aware of when selling a car with a high-performance engine is the current level of gasoline prices. Steep fuel price increases make consumers much more aware of what they are paying at the pump. These rapidly increasing fuel prices may lead potential buyers to think twice about whether to buy a high-performance car that uses a lot more gas than they are used to paying for. If this is an issue when you plan to sell your high-performance car, it can negatively affect its value.
Optional diesel engines
Most of the optional diesel engines in the US are found in pickup trucks. These truck owners appreciate the improved torque, towing capacity, and fuel economy of their diesel engines. This makes a diesel engine in a pickup a desirable option that will return most of its value when the time comes to sell it.
Hybrid vehicles are both the best and worst of both worlds. They let you run on electric power for short periods, improving your overall fuel economy. They can also run on gasoline until the normal-sized tank runs dry, eliminating any concerns about the range anxiety that battery electric vehicles can produce.
Unfortunately, you pay a large premium for a hybrid, because the manufacturer must build both an electric and a gasoline drive system into the vehicle. You will lose most of this premium at resale time. There is not a lot of demand for used hybrids, and there are also concerns about their long-term battery life, as well as whether the current technology will become obsolete within a few years.
Your car's condition
This has a lot to do with the value that is assigned to your vehicle. Valuation guides will take this into account as well. There are three different categories here, each of which is important to its overall condition and value:
This is what conveys your car's "curb appeal," and will make an immediate impact upon potential buyers. Is the body clean, shiny, and free of dents and scratches? Are the wheels and the glass areas clean? A good-looking exterior entices a buyer to engage with your vehicle - or to reject it if it looks uncared for.
Buyers will be spending most of their time inside the car, so they want it to be clean, tidy, and ready to drive away in. Are the seats and carpet clean, without excess wear and damage? Are the center console and other storage compartments clear of garbage, crumbs, and other debris? A nice, clean interior invites buyers to get in and get comfortable - a messy, dirty one can lead them to think that the entire vehicle has been neglected.
If you have looked after the basic mechanical needs of your vehicle, it should look presentable when you open the hood. There should be no major leaks from the engine or on the ground underneath, the belts and hoses should be in good condition, and the fluids should not be burnt, sludgy, or low when they are checked (and some buyers WILL check). This is a key part of a used car valuation, because the last thing a buyer wants is an unreliable car with serious mechanical problems.
Your car's title
The title of your car is your proof of ownership, but it can also identify your car as having a serious problem. Here are the different types of titles that a car can have:
Has your car enjoyed a relatively ordinary life? This means no serious accidents, it was not a lemon law buyback, and it has never had its odometer rolled back. This qualifies your car to have a clean title, which is the best kind.
These titles belong to cars that have had a variety of misfortunes, including:
- Major accidents
- Hail damage
- Stolen and recovered after being stripped
If the cost of repairing a vehicle like this is higher than its actual value, the insurance company declares such a vehicle "totaled." The vehicle's owner is paid the current market value, and the insurer now owns the damaged vehicle. Because of its severe damage, it will have its formerly "clean" title converted to a "salvage" title. This lets future buyers know of the vehicle's serious damage. The insurance company usually sells these vehicles to the highest bidder, who may scrap them, remove and resell any usable parts, or rebuild them into used cars that are resold into the marketplace.
If you are selling a car that has a salvage title, there are numerous limitations to consider:
- Most consumers will be suspicious of a used car with a salvage title.
- Valuation guides will automatically place them in "Poor" condition, so they will not be worth much.
- Most insurance companies will not provide collision or comprehensive coverage for them.
- Lenders do not want to provide financing on them.
- Dealers will not accept them as trade-ins.
The best solution to selling a car with a salvage title may be to junk it, once it is no longer in running condition. It will still have some value from any reusable parts, as well as its scrap metal.
Cars with salvage titles can achieve a slightly more desirable status in the automotive pecking order. Salvage cars that have been rebuilt, and then have passed a rigorous state safety inspection, can receive a "Rebuilt" title upgrade. This type of vehicle can be ideal for the used car buyer on a tight budget, if it has been properly repaired and is otherwise mechanically sound. If your salvage car is in good enough condition, you might consider having it inspected and getting a rebuilt title for it.
Unfortunately, it will still only be worth around half of what a normal used car of its type will sell for. Rebuilt cars have the same problems with insurance and financing as salvage cars do, but a private party looking for a below-market deal might take some comfort in that rebuilt title. Once again, if you can't sell it in the used car market, selling it to a scrap yard or recycler is always an option.
The number of previous owners
This is an interesting topic with both rational and emotional components. Most used car buyers would prefer to purchase a car that had just one owner. The used car market also values this highly. But does it really matter?
If a given used car has only one owner, who has taken care of it well and maintained it properly, that's a good thing. But what if an equivalent used car had two owners, both of whom cared for the car equally well? Does that car deserve to be lower in value? The second car is in the same condition as the first!
Perhaps we should be looking at how each owner approached his car care duties. If they all did it right, there's not a problem. Where buyers should be concerned is where there are a large number of owners, the car changes hands frequently, and the level of care is inconsistent from one to another. This is where problems can develop. A CARFAX or equivalent vehicle history report, provided by you, can give buyers a look at how your car was cared for during its lifetime, especially if you are not the first owner!
Your car's accident history
You can look at this as similar to a person's medical history. Has your car led a healthy, trauma-free life? Or has it been involved in one or more accidents, some of which may have been serious, requiring some very expensive and complex repairs to its structure, its body panels, and its mechanical parts? Which one is more likely to live a long, trouble-free life?
Accidents have a definite negative effect on the value of your car, even if they are minor and easily fixed. Why? Because there is a record of these incidents (if they were handled by an insurance company, as most are), and they will therefore show up on your car's vehicle history report. These reports are widely available to dealers and consumers, and they will reduce your resale value.
This is because used car buyers would much rather buy a car that has never been in an accident. No accidents means no accident repairs that could result in unforeseen problems down the road. A car that has had accidents is an unknown quantity, in terms of both safety and reliability. It must be sold at a reduced price, compared to an equivalent accident-free car.
Your car's service history
This is a key item when valuing what your car is worth. Your car's service history is the record of everything that has been done to maintain your car and keep it in good running condition. A complete service history proves that all scheduled maintenance has been performed, and that anything else that malfunctioned or wore out was properly repaired or replaced. Your service receipts and stamped service booklet will show that you have done this, so keep them to show buyers. A good service history is worth its weight in gold, relative to what your car is worth.
On the other hand, a car with gaps in its service history shows that its previous owner(s) did not care enough to keep the car in decent condition. Perhaps oil changes were missed, filters were not replaced, or major service intervals were skipped. This is a very bad thing that indicates accelerated wear and uncertain mechanical reliability in the future, and it will drive most prospective buyers away.
Your car's warranties and certifications
If your car is under warranty when you sell it, it will boost the value of the vehicle. Whether your car is under the terms of its new car warranty, an extended warranty, or a Certified Pre-Owned vehicle warranty, this is a great thing to offer the next owner. A used car with warranty coverage will edge out and be worth more than the same vehicle without the warranty. The next owner will have that warranty as a backup against potential mechanical problems.
Before you begin the process of selling your car, verify the terms of your current warranty. Confirm whether it is transferable to the next owner, and whether any transfer fees are involved. If it is transferable, you have a definite advantage in both value and customer appeal!
Your car's color
The exterior color of your car has a large effect on how it appeals to potential buyers. But there is an interesting divergence between how popular a car's color is, and how well it retains its value.
According to a 2017 study, the car colors that depreciate the least are yellow, orange, and green. These are also some of the rarest colors available. Because so very few cars are made in these colors, this could be an issue of supply and demand.
Meanwhile, the most popular car colors overall in the US are silver, white and black. Taken together, these three colors add up to fully 50% of all the cars sold in our market. These colors will depreciate more than the rare and odd colors mentioned above, but half of all the cars available in the used market will be painted one of these colors. That works out just fine, as the color tastes of used car buyers should line up with those of new car buyers.
Here's how much cars in various colors rank in terms of depreciation after three years, from lowest to highest depreciation:
There are two ways to look at this. If you do have a car in a rare color like yellow, orange, or green, you can probably get a little more for it - but there will be fewer buyers for it. Meanwhile, if your car is silver, white, black, or some shade of gray, it may sell for less, but there are lots of prospective buyers who will not mind the color.
Modifications and aftermarket options
You may be the type of car owner who is not satisfied with the way your car came from the factory. Perhaps you want to add more performance than the car was available with, or maybe you want it to look different from all of the others like it. There is nothing wrong with trying to make your car unique, but this may come back to bite you when you go to sell it.
Some aftermarket upgrades can enhance the value of your used car. Aftermarket alloy wheels can improve your car's appearance, if done right - they should not be excessively large, they should fit within the fenders without rubbing the body or suspension, they should be upright and not "stanced," and they should not be painted in a garish color. If your wheels make your car look "weird," you will drive away buyers. Selling a car that is too unique is very difficult, as your personal ideas of taste and style may not be shared among potential buyers. Custom paint jobs also fall into this category.
The same goes for body kits - subtle is good, extreme is not so good for buyers. And if the pieces of the kit are not finished to the same standard as the car's body, or they are banged up from scraping curbs and driveways, you may be better off removing them and returning your car to its stock appearance. You will probably get more for it when you sell.
DVD theater systems
Another aftermarket option that should return value to you when you sell it is a DVD theater system with one or more monitor screens, usually installed in the back of a minivan or SUV. Wireless headphones will make it even more appealing to buyers of these types of vehicles.
Aftermarket leather seat kits are available for cars that did not originally come with leather. If they are correctly installed, they can add value to your car, just as factory leather can.
Keep it legal
When it comes to performance upgrades, there can be issues of legality to consider. If you live in a state with strict emissions regulations, some engine modifications may keep your car from passing a smog inspection. This is a serious issue for the next owner of your car, and it could expose you to liability for selling a non-conforming vehicle. It could also void your car's powertrain warranty. Dealers will usually not take an extensively modified car as a trade-in, because it will not qualify for either an extended warranty or Certified Pre-Owned status.
Keep it safe
You don't want to compromise your car's safety when modifying it. Avoid steering wheels that eliminate the airbag, headlights that throw glare in other driver's eyes, "smoked" taillight assemblies that other drivers have difficulty seeing when approaching from the rear, and ultra-cheap, uncertified wheels.
Trucks and off-road vehicles
There is a segment of the used car market that does not mind certain types of aftermarket modifications. These are the buyers of trucks and off-road vehicles. Pickup truck buyers will value aftermarket items like bed liners, cab steps, rails, and running boards. If the truck is an off-road model, a lift kit with larger wheels and tires will add value. But these items must be of good quality, and they must be installed to a professional level. The same goes with off-road focused vehicles like Jeep Wranglers - appropriate modifications that improve the vehicle's performance in the rough stuff will appeal to buyers of that sort of vehicle.
A word about aftermarket window tinting. If you have had quality window tinting film applied to your car's windows by a professional installer, and it meets your state's regulations for placement, maximum level of tint, reflectance, and any other requirements, that's good. It can add value to your used car, especially in a hot, sunny climate. But if you decided to buy inexpensive film and do it yourself - and the finished job looks like it - your car's value will take a big hit. No one wants to drive around in a car with streaky, peeling purple windows that are full of air bubbles! In this case, you are better off removing the film before you put the car up for sale.
Your car's rarity
Most used car buyers are not looking for rare cars. They normally prefer mass-market vehicles that are plentiful, with a large quantity of used examples available for sale at any given time. This means lots of cars to choose from, and a better chance of finding one they like.
Rarity is usually more of an issue if you have a collector car or a classic vehicle to sell. If so, you will be dealing with a much more discriminating and knowledgeable universe of potential buyers. But rarity can be a double-edged sword, depending on exactly what type of rarity we are talking about.
If you are selling a mass-market collector-type vehicle that has a unique and desirable combination of options, you can probably find a number of qualified buyers, and you can likely get a good price for it. An example of this is the high-performance Dodge Challenger Hellcat, as compared to the average Dodge Challenger.
But if you have a truly rare classic vehicle that was only made in very small quantities, you will have difficulty selling it - unless you can find people who already own that type of vehicle, and who might want to buy another. Contact the owner's club for that brand and join it if you are not already a member. This is your best source for buyers of your rare vehicle. Of course, if you have something both rare and worth a lot of money, like a classic Ferrari, there are plenty of buyers available worldwide. And if you have something truly unique and valuable, you can go the upscale classic car auction route, and see how high the bids go!
Other car-related factors
There are some other considerations to keep in mind as you prepare your car for sale:
Any open recalls
If your vehicle has been recalled for any issues, it should be repaired before you try to sell it. If you do not, its value will be reduced. This is easily available public information, and thorough buyers will check. This is especially important if there are any safety-related recalls open on your car (exploding airbags, anyone?), but mechanical recalls should also be taken care of, to eliminate any uncertainty in the minds of buyers. Open recalls will lower your car's value and can make it totally undesirable if safety issues are involved.
It is a highly rated vehicle
If your car has won an award from a publication or a safety-related organization has endorsed it, be sure to let buyers know. This can translate to increased prestige and desirability for your car among buyers, enhancing what your car is worth in the used car market.
Marketplace and seller-dependent factors that influence a car's value
We have just gone through each of the many car-related factors that determine what your car is worth, as compared to other used cars. Let's now turn to some areas of automotive valuation that lie far outside of your car's age, mileage, condition, and color.
We are now entering the used car marketplace, where forces beyond your control can influence your car's value, as well as your ability to sell it. Let's review how it works, so you can use the knowledge to your advantage!
The state of the used car
The world of used cars is made up of buyers and sellers. It does not operate in a vacuum. The used car market is influenced by many of the supply-and-demand issues that affect any economic system. These factors include:
- How many buyers there are
- How many sellers there are
- The quality of the used car fleet
- How good the new car market has been for the past several years (because all used cars start out as new ones)
- The prices of new cars
- The supply of unsold new cars
The used car marketplace is a dynamic mechanism with many moving parts:
- If there are more buyers than sellers, prices will go up.
- If there are more sellers than buyers, prices will go down.
- If there are not enough good quality used cars available, some buyers will buy a new car instead.
- If used car prices get too high and approach those of new cars, some buyers will choose to buy new over used.
- If new car prices get too high for buyers to afford, used car sales will increase.
- If new car sales slow, and dealers have too much inventory, the discounts and financing deals put in place to clear them out will attract used car buyers.
Are you selling what buyers want?
One more part of the mix is what consumers are looking for in a used car. Recent sales trends have seen the rapid rise of SUVs over cars in new car sales. This preference is carrying over to the used car market, where increasing interest in used SUVs may reduce the demand for used passenger cars. This is good if your used car is an SUV, and not so good if you are trying to sell a used passenger car.
Method of sale
You have a choice of several different ways to sell your used car. They each have their pros and cons. Once you understand the differences, it will be easier to take the route that seems right for you and your car.
Trade it in or sell it to a dealership
This method involves selling your car to a dealer, who will then resell it for a profit. There are a few distinct strategies to consider here, depending on your ultimate objective:
Trading it to a dealer and buying another vehicle there
Pros: If you are planning to replace your car with a new (or used) one, trading in your car to the dealer you are buying from is very convenient. You can combine the selling and the buying processes into one transaction. Another benefit is that in most states, the value of your old car will be deducted from the price of your new one, lowering the amount of sales tax you must pay. This can save you a lot of money. Depending on the condition and type of your car, the dealer will either sell it on his lot, wholesale it to another dealer, or send it to an auction.
Cons: Dealers will offer you less for your used car, because they need to make a profit when they sell it. Dealers also need to allow for any costs of reconditioning it, the warranty that they may offer with it, and a hefty profit margin on top. You also need to be aware of getting the best deal you can on both sides of the transaction - on your trade-in and on the new car. Dealers are famous for doing some tricky sleight-of-hand here, giving you more for your trade-in while worsening the deal on the new car. It is best to keep both sides of the transaction separate. Get your best deal on the new car itself first, then mention that you have a trade-in, and what will they give you for it? After comparison shopping at a few different dealers, you will know where the best combination of trade-in deal and new-car deal can be had.
Selling it outright to a dealer
Pros: Dealers make much more on used cars than new ones, so they are always looking for good used examples. If your car is in the "sweet spot" for a used car (less than six years old and under 80,000 miles), it is a perfect candidate for a dealer's lot. Older and/or higher mileage vehicles may be wholesaled or auctioned off, unless you are selling to a used car dealer who specializes in cars like yours. You can shop your car around to several dealers (start with those who sell the same brand as yours) and take the best deal. The dealer will do all the paperwork and make the process as easy as possible.
Cons: As with the trade-in scenario, a dealer will always pay less for your used car, because it must be resold at a profit. That profit, unfortunately, comes out of your hide. If you must get top dollar for your car, trading it in is not the best way to go.
Private party sale
This technique is simply the process of selling your car to another individual who is in the market for a used car. This is a direct seller-to-buyer transaction, with no dealer in the middle to take a cut. More than half of all the used cars sold each year are private party sales. Private party sales will get you the best possible price for your car, but you will have to work harder, and it may take longer, to get across the finish line.
Pros: More money in your pocket! This is true for used cars across the board, not only the younger, low-mileage vehicles in the "sweet spot," but also the high-mileage older examples. Private party buyers looking for low-cost transportation will buy these cars, even though a dealer would probably send them right to an auction. This also applies to cars with serious accident repairs, which dealers will either avoid or pay you very little for. Simply list your car for sale on Craigslist (in the "cars & trucks - by owner" section) and a site like AutoTrader.com or Cars.com. Describe your car honestly, and play up its strengths, whatever they may be. Clean your car thoroughly before shooting some decent photos of the inside, outside, and under the hood. Research your car's private party value, decide on what you will accept for it, and then price it a bit higher, to allow for negotiation. If enough people look at your car, you should be able to get the price you want. If you are lucky, you may even have a bidding war erupt over your car, and you could end up with more than you asked for it! Be patient and let the buyers come to you.
Cons: It will take more time to sell your car this way, and you will have to deal with the public. There will be plenty of low ballers, who simply want your rock bottom price. The key to success here is to not be in a rush to sell. Simply ask each prospective buyer to make his or her best offer, and then explain that you will be in touch if their price ends up being the highest. If they storm out, don't worry about it - they are unlikely to give you a fair price.
Throughout the process, always be aware of your personal safety. Don't let strangers into your home or apartment. Meet instead in a public place, meet during the daytime and avoid the night, and don't engage with people who do not seem quite right to you. If potential buyers want to test drive the car, decide whether you feel safe enough to go along with them (you can also ask a friend to ride along), or whether you will let them drive your car by themselves. If you are willing to let them drive it on their own, have them give you a credit card and the keys to the car they arrived in, and take a photo of their driver's license, for security's sake. Be safe.
Auction it off
This is how the automotive industry buys and sells used cars, on a truly massive scale. A total of 9.9 million used vehicles were sold at physical auctions in 2018. Add in the online auctions, and it comes out to 16.6 million used vehicles. That's a lot of cars! Some of these auctions are open to the public for buying and selling, so that's the way for an individual selling a used car to go, if you choose the auction route.
Pros: A lot of potential buyers will see your car go across the block. If it sells, it will be sold that day. There are no safety issues or advertising costs like with a private party sale, and you are likely to get more for your car than a dealer would give you on a trade-in. You can set a reserve price, which will guarantee you that amount if your car sells. If it does not sell, you can lower your reserve and run it through again. You can choose a local physical auction or an online auction, based on the type of car you are selling and how broad of an audience you think you need to sell it. The auction can facilitate the title transfer and guarantee payment after the sale.
Cons: You will have to pay a seller's fee to the auction when your car is sold. This is usually a few hundred dollars for the average car. Public auctions tend to be smaller than those run exclusively for the trade. Online auctions can present problems with sales that don't stick, as well as shipping problems if the buyer is located far away.
What's the best way to sell your car if you're in a rush?
Let's say that you have to turn your used car into cash as soon as humanly possible. How can you make this happen? You may have to sacrifice some profit for speed when you do this. Here are a few tips on quickly selling your car.
- Advertise it on Craigslist at a crazy low price with a tight time limit
- Take it to CarMax for a guaranteed price they will pay you on the spot
- Trade it to a dealer and accept the first offer
- Sell it quickly through apps like Carvana and Vroom
- Contact SellMyCarOnline.com to get rid of your car fast
The place where you live can determine your car's value, based on what kind of a place it is:
- If you reside in a place with a cold wintry climate, there will be more demand for all-wheel drive vehicles and four-wheel drive trucks.
- Buyers in warmer places that see no snow prefer cars with front-wheel drive or rear-wheel drive and may not be interested in all-wheel drive vehicles.
- Sports cars and convertibles sell much better in warmer climates near the coasts.
- Many buyers living in big cities prefer smaller vehicles that are easier to park, and maneuver better in traffic.
- Buyers in rural areas with low gas prices tend to prefer larger, more comfortable cars that are good for longer trips.
The time of year
This can be seen as a further refinement of the location concept above. Those four-wheel drive trucks will be in much more demand, even in areas with brutal winters, as the snowy months approach. Selling prices will be higher as a result. If you are trying to sell a convertible in a place like that, you should definitely wait until late spring, when all the snow has melted, and summer is just around the corner. That is when you will get top dollar.
The economic climate
There are two major economic issues that can weigh heavily on what your car is worth:
The perceived state of the economy
This is a combination of factors that includes employment levels, workers' earnings, and consumer confidence. When consumers feel like their jobs are secure, their incomes are stable or rising, and things look like they will continue to get better, they will spend money as needed. This means that when cThe state of gas pricesonsumers need a used car, they will go out and find one that is within their budget. As long as interest rates stay reasonable, this keeps used car demand up, and that means higher prices. That's good for you, the seller!
On the other hand, if unemployment goes way up, people lose their jobs, interest rates jump, and the consumer outlook turns gloomy, a large purchase commitment like a used car can be put off indefinitely. These potential used car buyers will instead repair their current cars, in the hopes of keeping them running a bit longer. Used car demand will drop as a result of fewer buyers, and you will find it necessary to cut your car's price, to attract a dwindling number of buyers. And that is bad for you, the seller!
The state of gas prices
We have all seen this happen before. When gas prices suddenly spike, people feel it in their wallets immediately, and will likely cut back their spending in other areas. Why? Because if you need to drive to work or school, you don't have the option of not driving there to save gas! If gas prices drop, sales of larger cars and trucks increase, as consumers put their imagined "gas savings" into the price of a bigger, thirstier vehicle.
What this means for you, as a used car seller, depends on what type of vehicle you are selling, compared to the current level of gas prices. A smaller car with good fuel economy will always sell, but it will sell much faster when more people are looking for one - like when gas prices are high. A larger car with poor gas mileage will sell well when gas is cheap, but it may not sell at all if gas prices rapidly increase.
Prices of Scrap Metal
There's a lot of metal in a car. There are ferrous (or iron-based) metals like iron and steel. There are also non-ferrous metals, like aluminum and copper. Once your car is past the point where it can practically function as transportation, and all its reusable parts have been removed, what's left is its value as scrap metal. The per-pound prices of these metals are determined by the scrap metal market and will fluctuate on a daily basis.
The more scrap metal that there is in your car, the more it will be worth as scrap. This means that larger, heavier cars and trucks are worth more as scrap. If your car is headed to the scrap yard, its scrap value, based on the current prices, will be determined by its total weight of each metal. You will then be paid for it, minus the scrap yard's processing and handling fees.
What buyers are looking for in a used car
After seeing what so many of the factors that add to a car's value are, it is fairly simple to draw a picture of what the ideal used car looks like. How does your car match up to the desirable characteristics of the perfect used car?
- It looks good, inside and out
- It is in good mechanical condition, with a complete and documented service history
- It has good tires that will last a while
- It drives, handles, and stops well
- It gets good fuel economy
- It's not too old
- It doesn't have too many miles on it
- It has the right safety features for its age
- It has a warranty that's transferable
How you prepare yourself and your car for sale
There are many things about your used car that you can't change, but there are some simple strategies you can use to improve its value, in the eyes of the shoppers in the used car market (assuming that it's not a total basket case):
- Wash and wax your car's exterior
- Clean and declutter the interior
- Collect and organize all your service and repair records
- Get the dings and the dents in the body repaired
- If your vehicle is due for service, have it done now
- Fix any other mechanical problems
- If your tires are worn out, replace them
- Take care of any open recalls immediately
This is an excellent way to win at the psychological game of "What is my car worth?" Because whatever the various valuation websites tell you, the reality is that a given used car buyer will not pay you more than he or she thinks your car is worth. Maximizing the worth of your vehicle, by turning it into a clean, shiny, dent-free used car in good mechanical condition, will always get you top dollar. It's definitely worth the effort.
How to Estimate The Value of
There are a few different ways to get a good idea of what your car is worth, before you go to sell it. Let's review them, one by one:
Using pricing guides
A good place to start checking what your car is worth is the various pricing guides. Keeping in mind that each of these guides will provide you with different pricing for the same car, so using them as a group to create a "ballpark" range of prices, focused on the specific way you plan to sell your car, is the best way to go.
Kelley Blue Book (KBB)
The Kelley Blue Book (www.kbb.com) uses data that includes auction prices and actual sales transactions. If you select "My Car's Value" on the home page, you will get an appraisal of your car's value. After asking for your car's year, make, model, and mileage, KBB requests that you to rate the condition of your car, based on of their four categories: Excellent, Good, Fair and Poor. KBB then provides you with two different values: the trade-in value if you trade your car to a dealer and the private party value if you sell it yourself.
Edmunds (www.edmunds.com) is primarily set up to sell you a car, but they do offer a car appraisal tool here. Their valuations of used cars are based on dealer transactions, depreciation, and consumer information, plus your vehicle's age and mileage. Edmund's has five classifications in its condition system: Outstanding, Clean, Average, Rough, and Damaged. Edmund's system works in a similar way to KBB's, giving you trade-in and private party values. Edmunds also considers transactions made in your local area, giving you a better idea of what your car is worth in your specific location. Edmunds also adds your vehicle's retail value at a dealer. This is what your car would likely be retailed for by a dealer, once it was prepared for resale. Seeing the huge difference between trade-in and retail values lets you know why used cars are so much more profitable to a dealer than new cars are!
The NADA Guides ((www.nadaguides.com) are also known as the Yellow Book. These guides are put out by the National Automobile Dealers Association, for consumer use. There are also versions of the NADA Guides for use with classic cars, motorcycles, boats, RVs, and manufactured homes. After asking you to enter your car's make, model, options, mileage, and your zip code, it will give you four pricing classifications: Rough Trade-In, Average Trade-In, Clean Trade-In, and Clean Retail. This will give you a general idea of what your car is worth in your area if you are trading it to a dealer, as well as what it would retail for on the dealer's lot.
Black Book is a vehicle valuation subscription service that focuses on information provided primarily to dealers and lending institutions. They do offer a free consumer-oriented online used car valuation tool here, as part of the newcars.com website. You simply enter your car's basic information, options, and zip code, and it will give you a range of trade-in values that you might be offered by a dealer. This Black Book valuation tool is much more basic than the others listed above. It doesn't consider condition, it does not give you a private party value, and it is unable to rate vehicles more than about 15 years old.
Other online pricing sources
Beyond the pricing guides, there are some additional online sources for checking what your car is worth:
Carfax takes a completely different, much more specific approach to used car valuation, aimed primarily at used car buyers. Using several vehicle history-related databases, Carfax can generate a report for an individual used vehicle, one that can tell you about:
- Previous owners (average car has 2.4 owners; 52% of cars for sale are one-owner)
- Maintenance (well-maintained cars have fewer problems later in life, adds to value)
- Accidents (was damage properly repaired? 1 of 5 cars has been in an accident)
- Open recalls (20% of all used cars and 25% of minivans have unfixed recalls)
Carfax also checks for items like structural damage, flood damage, airbag deployment, mileage rollbacks, hail damage, whether the car has been branded a lemon, and more.
For the car you currently own, Carfax also has a valuation tool that asks only for your zip code, plus either your VIN or license number and state. From that information, it will give you trade-in, private party, and retail value estimates.
Autotrader.com is a massive online nationwide marketplace for buying and selling new and used cars. Autotrader uses the data from its own listings to provide you with a valuation based on the average asking prices for similar vehicles in your area. Using their valuation tool, you can choose from trade-in or private party ("Sell a car") valuations.
Seeing what your car is worth in the physical world
Beyond the pricing guides, there are some additional online sources for checking what your car is worth:
CarMax and similar used car "superstores" will happily give you a solid cash offer, and will pay you that amount on the spot, should you choose to sell. This is not a website tool, so you must drive your vehicle to the nearest CarMax location for an appraisal. You are not required to sell your vehicle to them, but their offer will give you an idea of the actual market value of your particular vehicle, at that point in time.
Other local car dealers
If you still feel like you need a better idea of the local pricing in your area, you can visit some new and used car dealers. If your car is less than eight years old, start with new car dealers of the same brand, then go to new car dealers of competitive brands. Your same-brand dealer may offer you more, but all new-car dealers are interested in clean used cars. If you have something older or less "clean," used-car-only dealers are a better option.
Ask your mechanic
If you (and your car) have an existing relationship with a mechanic who has been servicing the car, this can be a helpful source for both pricing and selling it. Many mechanics do a bit of used car buying and selling on the side, so they will have a feel for local market values. They may also know of another customer of theirs who is in need of a car and will be pleased to bring you and the buyer together. The mechanic likely has an intimate knowledge of your car's strengths and weaknesses and can make them clear to the prospective buyer. This can result in a very transparent transaction, with no repercussions or buyer's remorse after the sale is made.
What prospective buyers are willing to pay
This is difficult to truly know without actually putting your car up for sale in the real world. But here is a process you can use, to be sure that you are not pricing your used car too high for a local private party to buy, but are still getting a reasonable price that you will be satisfied with:
- Start with the trade-in value of your car, from your choice(s) of valuation guides and websites, as well as CarMax, if you got a price there.
- Add the costs of advertising it, as well as the value of the time you will spend showing and selling people your car (add $1,000 or so). This represents the lowest price you should take for your car - period.
- Look up the private party prices that cars like yours, and in the same condition, are being advertised for locally.
- Price your car higher than the average asking price, but lower than the highest asking price, as long as the prices you see are realistic. This should be higher than the price from Step 2 and will ideally give you some room to negotiate down if necessary, while still pricing your car appropriately for the local market.
Which factors are
important to different types of buyers?
When getting your car ready to sell, what your car is worth is really a function of who you are planning to sell it to. Each type of potential buyer lives in an automotive world where certain things are more important than others. Let's drill down into the motivations and needs of three different types of used car buyers: used car shoppers, car dealers, and salvage yards.
Used Car Shoppers
Private party used car buyers are usually focused on their practical need for a car. The car is needed so someone can drive to work, to school, or to run errands. This means that value and reliability are first and foremost. Appearance is also important, because it speaks to the overall quality of care that the car has received.
If your used car has been serviced regularly (and you have the receipts to prove it), it has been kept clean, there are no open recalls, and the mileage is not excessive for its age, you have a very appealing car in the eyes of a used car shopper. A car like this will always find a buyer. Even if you have a somewhat older, higher-mileage car that you are trying to sell, this will still hold true. But at the lowest price points, a car that runs is all that people will expect, so let your conscience be your guide, and disclose all its problem areas!
When you sell or trade your used car to a dealer, the primary concern is how much money it will cost to bring it up to their lot's standards, and how much they can make when it sells. Used cars generate incredible profits for dealers, especially if they need little or no work done up front. A new car dealer wants a clean car with "curb appeal," in good mechanical condition, and with no body damage. For every dollar the dealer must spend to reach that standard, the price you are paid for it will likely drop by two dollars.
Most dealers are also not interested in anything out of the mainstream, unless they specialize in such things. Your purple monster truck is probably not a good candidate for the average dealer's lot. But compact and midsize sedans and SUVs in shades of black, white, silver, and gray will sell day in and day out. That's what dealers like - unless they have too many cars like yours when you try to sell it to them. Then they will either pass on it or give you an extreme lowball price.
Salvage yards have a totally different perspective on what your car is worth. They don't care about how well you took care of it, or how many miles are on it. To a salvage yard, the formula for what your car is worth comes down to the value of its parts, the value of its scrap metal, and the cost of processing it.
Once that all its fluids are removed, the car will be dismantled, with all of its usable parts removed, catalogued, and stored. These reusable parts will be sold to those who are looking for lower-cost parts to keep their older cars running, or to fix body damage from an accident. Many very useful parts removed from a junk car can be resold, including:
Key Tips on Increasing Your Car's Value
There are so many easy and inexpensive ways to improve what your car is worth. The best way to approach this subject is to observe good car care practices throughout the entire time period that you own your car. This way, your car will always be in very good condition, ready to be sold whenever that becomes necessary. This is a lot easier, and much more economical, than dumping a ton of money into an unappealing car to make it salable, right before you get rid of it.
Here's a list of what you can do on an ongoing basis, to keep your car looking and running great:
- Have your car serviced at the recommended intervals and save all the receipts.
- Have any mechanical issues fixed immediately.
- Keep it clean and shiny, inside and out.
- Promptly repair dings and dents in the body.
- Replace the tires when they are worn and keep them clean.
- Take care of any open recalls quickly.
- Park it where the finish won't get damaged by trees or birds.
- Drive the car gently and don't abuse it.
Some other tips include buying a car that has a high resale value to begin with (search online for a list), and having advanced safety features that will increase the car's value in the eyes of the next buyer. If your car has items like automatic emergency braking and rear cross-traffic alert, the protective nature of these features immediately makes it worth more than other used cars without them.
Your car should be worth the same to a buyer as it is to you
We sincerely hope that this article has answered all your questions about what your car is worth, and how to increase its value. When you get right down to it, getting the maximum value for your car when you sell it follows the same formula as making your car run well and look its best while you own it. Take good care of your car, and it will take good care of you - all the way up to when you sell it!